Wednesday, October 8, 2025

Latest

Quebec Minimum Payment Law Linked To Higher Credit Card Delinquency

A recent study by researchers from the Bank of Canada and Rice University has revealed mixed results from a Quebec law aimed at reducing credit card debt. The law, which took effect in August 2019, required credit card issuers to raise minimum payment requirements on existing cards from as low as $10 to at least 2% of the statement balance.

While the policy succeeded in reducing revolving debt, it led to unexpected consequences. Six months after implementation, credit card delinquency rates in Quebec rose by approximately 10% compared to pre-policy levels, particularly among cardholders who historically carried balances.

The study, using a difference-in-differences methodology comparing Quebec to Ontario, found that the average minimum payment increased by $23 in the first month, accumulating to a $152 increase over the first seven statements. This resulted in a 3.4% decline in revolving debt after six months.

However, the law also impacted credit access. For new credit cards opened after August 2019, the minimum payment requirement was set at 5%. This led to a reduction in new credit card issuances in Quebec compared to Ontario. Cards that were issued had lower credit limits, suggesting that lenders tightened their approval criteria in response to the policy.

Interestingly, the researchers observed that some lenders attempted to circumvent the stricter requirements for new cards by aggressively marketing to existing customers just before the law took effect. This resulted in a temporary surge of new card openings with more favorable terms in July 2019.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Fortune Bay: The Potential Billion Dollar Project

Japan Gold Enters New Chapter as Barrick Alliance Concludes – John Proust

Barrick Mining’s “Company Defining [Gold] Discovery”

Recommended

Nord Precious Metals Produces High Grade Silver Concentrate From Tailings

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Related News

Forest Fires Lead To Exploration Suspensions In Quebec

As the Province of Quebec grapples with forest fires, the Ministry of Energy and Natural...

Monday, June 5, 2023, 10:55:31 AM

Bank of Canada Prepares to Aggressively Tackle Inflation

The show must go on! Despite growing uncertainty surrounding geopolitical tensions in eastern Europe and...

Saturday, March 26, 2022, 01:05:00 PM

Bank of Canada Maintains Pace of Bond Purchases, Near-Zero Interest Rates

The Bank of Canada has decided to keep its current pace of asset purchases, as...

Thursday, September 9, 2021, 02:39:00 PM

Bank of Canada Cuts Interest Rate By 50 Basis Points Again To 3.25%

The Bank of Canada delivered another significant rate cut on Wednesday, lowering its benchmark interest...

Wednesday, December 11, 2024, 10:09:42 AM

Canadian Businesses Anticipate Higher Inflation as Supply Chain Disruptions and Labour Shortages Worsen

Businesses across Canada are facing broad economic challenges related to supply chain disruptions, material and...

Tuesday, January 18, 2022, 10:04:00 AM